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United States Patent |
5,689,579
|
Josephson
|
November 18, 1997
|
Rule-based circuit, method and system for performing item level
reconciliation
Abstract
A reconciling circuit for, and method of, reconciling a first database with
a second database, the first database containing first item data arranged
in records and fields, the second database containing second item data
arranged in records and fields. The reconciling circuit includes: (1) a
matching circuit for comparing the records of the first database with the
records of the second database, the matching circuit placing a designation
on mismatching ones of the records of the first and second databases, (2)
at least one field mismatch tolerance rule indicating, by field, an
allowed extent of mismatch and (3) a mismatch tolerance circuit for
applying the at least one field mismatch tolerance rule to the fields of
the mismatching ones, the mismatch tolerance circuit removing the
designation when the fields of the mismatching ones fall within the
mismatch tolerance rules.
Inventors:
|
Josephson; Stanley M. (Dallas, TX)
|
Assignee:
|
J.D. Carreker and Associates, Inc. (Dallas, TX)
|
Appl. No.:
|
587936 |
Filed:
|
January 17, 1996 |
Current U.S. Class: |
382/137; 705/45; 902/38 |
Intern'l Class: |
G06K 009/00 |
Field of Search: |
382/137,138,139,140,309
395/230,239,245
902/38,40
235/379
|
References Cited
U.S. Patent Documents
4264808 | Apr., 1981 | Owens et al. | 235/379.
|
4270042 | May., 1981 | Case | 235/379.
|
4523330 | Jun., 1985 | Cain | 382/7.
|
4694397 | Sep., 1987 | Grant et al. | 364/408.
|
4823264 | Apr., 1989 | Deming | 364/408.
|
4948174 | Aug., 1990 | Thomson et al. | 283/58.
|
4974878 | Dec., 1990 | Josephson | 283/67.
|
5038283 | Aug., 1991 | Caveney | 364/403.
|
5040226 | Aug., 1991 | Elischer et al. | 382/7.
|
5121945 | Jun., 1992 | Thomson et al. | 283/58.
|
5224173 | Jun., 1993 | Kuhns et al. | 382/2.
|
5237159 | Aug., 1993 | Stephens et al. | 235/379.
|
5265007 | Nov., 1993 | Barnhard, Jr. et al. | 364/408.
|
5373550 | Dec., 1994 | Campbell et al. | 379/100.
|
5412190 | May., 1995 | Josephson et al. | 235/379.
|
5488671 | Jan., 1996 | Kern | 382/138.
|
5532464 | Jul., 1996 | Josephson et al. | 235/379.
|
Foreign Patent Documents |
57-164368 | Oct., 1982 | JP | 364/408.
|
57-187762 | Nov., 1982 | JP | 235/379.
|
Other References
"V Series Item Processing System Tape Input/Ouput Module", UNISYS brochure,
5 pages, (no date).
Sales literature describing product by "StarChek" dated Feb. 17, 1995
entitled Star Check--Advance Notification System, 6 pages.
Sales literature entitled "Star Systems, Inc.--Overview" by StarChek, 12
pages (no date).
Sales literature describing StarChek Advance Notification System dated Jul.
30, 1993, 4 pages.
Literature dated Sep. 6, 1993 entitled ". . . While Low Cost Alternative
Gets Test Run with Eight Banks," 1 page.
Article dated Friday, May 26, 1995, from the "American Banker" entitled
Star System Sets Up Firm to Market Data Base for Thwarting Check Fraud, by
Beth Piskora, 1 page.
Article dated Jul. 1993 from "Checks & Checking" entitled California Banks
Leading Assault on Check Fraud, pp. 2.
|
Primary Examiner: Johns; Andrew
Attorney, Agent or Firm: Hitt Chwang & Gaines, P.C.
Claims
What is claimed is:
1. A reconciling circuit for use in electronic check processing for
reconciling a first database with a second database, said first database
containing first item data arranged in records and fields, said second
database containing second item data arranged in records and fields, said
reconciling circuit comprising:
a matching circuit for comparing said records of said first database with
said records of said second database, said matching circuit placing a
designation on mismatching ones of said records of said first and second
databases;
at least one field mismatch tolerance rule indicating, by field, an allowed
extent of mismatch; and
a mismatch tolerance circuit for applying said at least one field mismatch
tolerance rule to said fields of said mismatching ones, said mismatch
tolerance circuit removing said designation when said fields of said
mismatching ones fall within said mismatch tolerance rules.
2. The circuit as recited in claim 1 wherein said first database is a
database of predetermined presentment information relating to negotiable
instruments sent from a presenting financial institution (FI) to a
receiving FI and said second database is a database of information
captured from said negotiable instruments at said receiving FI.
3. The circuit as recited in claim 1 wherein said fields include fields of
a magnetic ink character recognition (MICR) line on a negotiable
instrument.
4. The circuit as recited in claim 1 wherein each of said records
corresponds to a single negotiable instrument sent from a presenting
financial institution (FI) to a receiving FI.
5. The circuit as recited in claim 1 wherein each of said records
corresponds to a bundle of negotiable instruments sent from a presenting
financial institution (FI) to a receiving FI.
6. The circuit as recited in claim 1 wherein said at least one field
mismatch tolerance rule is a rule concerning an allowed number of
character deviations in said fields.
7. The circuit as recited in claim 1 wherein said at least one field
mismatch tolerance rule is a rule concerning an allowed substitution of
characters in said fields.
8. The circuit as recited in claim 1 wherein said at least one field
mismatch tolerance rule is a rule concerning a pattern of adjoining
records of said first and second databases.
9. The circuit as recited in claim 1 wherein said at least one field
mismatch tolerance rule adapts over time as a function of said first and
second item data.
10. The circuit as recited in claim 1 wherein said second database is a
database of information captured from negotiable instruments at a
receiving financial institution (FI) by a magnetic ink character
recognition (MICR) reader, said mismatch tolerance circuit employable to
diagnose an operation of said MICR reader.
11. A method of operation for controlling an electronic check processing
system for reconciling a first database with a second database, said first
database containing first item data arranged in records and fields, said
second database containing second item data arranged in records and
fields, said method comprising the steps of:
establishing at least one field mismatch tolerance rule indicating, by
field, an allowed extent of mismatch;
comparing said records of said first database with said records of said
second database;
placing a designation on mismatching ones of said records of said first and
second databases;
applying said at least one field mismatch tolerance rule to said fields of
said mismatching ones; and
removing said designation when said fields of said mismatching ones fall
within said mismatch tolerance rules.
12. The method as recited in claim 11 wherein said first database is a
database of predetermined presentment information relating to negotiable
instruments sent from a presenting financial institution (FI) to a
receiving FI and said second database is a database of information
captured from said negotiable instruments at said receiving FI.
13. The method as recited in claim 11 wherein said fields include fields of
a magnetic ink character recognition (MICR) line on a negotiable
instrument.
14. The method as recited in claim 11 wherein each of said records
corresponds to a single negotiable instrument sent from a presenting
financial institution (FI) to a receiving FI.
15. The method as recited in claim 11 wherein each of said records
corresponds to a bundle of negotiable instruments sent from a presenting
financial institution (FI) to a receiving FI.
16. The method as recited in claim 11 wherein said at least one field
mismatch tolerance rule is a rule concerning an allowed number of
character deviations in said fields.
17. The method as recited in claim 11 wherein said at least one field
mismatch tolerance rule is a rule concerning an allowed substitution of
characters in said fields.
18. The method as recited in claim 11 wherein said at least one field
mismatch tolerance rule is a rule concerning a pattern of adjoining
records of said first and second databases.
19. The method as recited in claim 11 further comprising the step of
adapting said at least one field mismatch tolerance rule over time as a
function of said first and second item data.
20. The method as recited in claim 11 further comprising the step of
capturing said second database from negotiable instruments at a receiving
financial institution (FI) by a magnetic ink character recognition (MICR)
reader, said mismatch tolerance circuit employable to diagnose an
operation of said MICR reader.
21. A network of processing systems, including a presenting financial
institution (FI) processing system and a receiving FI processing system,
for reconciling a first database with a second database, said first
database containing first item data arranged in records and fields, said
second database containing second item data arranged in records and
fields, said network comprising:
a matching circuit for comparing said records of said first database with
said records of said second database, said matching circuit placing a
designation on mismatching ones of said records of said first and second
databases;
at least one field mismatch tolerance rule indicating, by field, an allowed
extent of mismatch; and
a mismatch tolerance circuit for applying said at least one field mismatch
tolerance rule to said fields of said mismatching ones, said mismatch
tolerance circuit removing said designation when said fields of said
mismatching ones fall within said mismatch tolerance rules.
22. The system as recited in claim 21 wherein said first database is a
database of predetermined presentment information relating to negotiable
instruments sent from a presenting financial institution (FI) to a
receiving FI and said second database is a database of information
captured from said negotiable instruments at said receiving FI.
23. The system as recited in claim 21 wherein said fields include fields of
a magnetic ink character recognition (MICR) line on a negotiable
instrument.
24. The system as recited in claim 21 wherein each of said records
corresponds to a single negotiable instrument sent from a presenting
financial institution (FI) to a receiving FI.
25. The system as recited in claim 21 wherein each of said records
corresponds to a bundle of negotiable instruments sent from a presenting
financial institution (FI) to a receiving FI.
26. The system as recited in claim 21 wherein said at least one field
mismatch tolerance rule is a rule concerning an allowed number of
character deviations in said fields.
27. The system as recited in claim 21 wherein said at least one field
mismatch tolerance rule is a rule concerning an allowed substitution of
characters in said fields.
28. The system as recited in claim 21 wherein said at least one field
mismatch tolerance rule is a rule concerning a pattern of adjoining
records of said first and second databases.
29. The system as recited in claim 21 wherein said at least one field
mismatch tolerance rule adapts over time as a function of said first and
second item data.
30. The system as recited in claim 21 wherein said second database is a
database of information captured from negotiable instruments at a
receiving financial institution (FI) by a magnetic ink character
recognition (MICR) reader, said mismatch tolerance circuit employable to
diagnose an operation of said MICR reader.
Description
COPYRIGHT NOTICE
A portion of the disclosure of this patent document contains material that
is subject to copyright protection. The copyright owner has no objection
to the facsimile reproduction by anyone of the patent disclosure, as it
appears in the Patent and Trademark Office patent files or records, but
otherwise reserves all copyright rights whatsoever.
CROSS-REFERENCE TO RELATED APPLICATION
This application is a related to application Ser. No. 08/023,364, filed on
Feb. 26, 1993, for an "Electronic Check Presentment System Having a Return
Item Notification System Incorporated Therein," now U.S. Pat. No.
5,412,190, a continuation-in-part of original application Ser. No.
07/731,529, filed on Jul. 17, 1991, for an "Electronic Check Presentment
System," now U.S. Pat. No. 5,237,159.
REFERENCE TO MICROFICHE APPENDIX
A microfiche appendix containing a computer program listing was submitted
with Ser. No. 07/731,529 and is incorporated herein by reference for all
purposes.
TECHNICAL FIELD OF THE INVENTION
The present invention is directed, in general, to the field of electronic
check processing and, more specifically, to a rule-based circuit, method
of operation and system for performing item level reconciliation for use
with electronic check processing systems and dam processing apparatus.
BACKGROUND OF THE INVENTION
Conventionally, financial institutions ("FIs"), such as banks, have handled
the transfer and presentment of negotiable instruments, such as checks and
drafts, for payment in a manual, paper-based fashion. At specified times
each day, "sending" FIs sorted all negotiable instruments presented to
them by depositors and other correspondent FIs into bundles. Each of the
bundles contains the negotiable instruments for the particular FIs on
which they are drawn (e.g., "drawee" or "paying" FI).
The sorted bundles of negotiable instruments were then typically segregated
into batches of negotiable instruments according to an assigned American
Banking Association ("ABA") routing/transit number ("R/T") printed on the
face of the negotiable instrument. One or more of these batches were then
aggregated for shipment to the paying FI. A derailed listing and a cover
letter, commonly collectively referred to as a "cash letter," were
attached to each such shipment of negotiable instruments. The cash letters
presented the dollar amount of all negotiable instruments within the batch
and summarized its accumulated dollar amount. This summary information
often included the names of the paying and sending FIs, the preassigned
R/T associated with each of the same, the number of negotiable instruments
in the batch and the total dollar amount of all of the negotiable
instruments in the batch.
When the paying FI received the cash letter, it verified its contents
(i.e., negotiable instrument amounts balanced with the totals contained on
the cover letter), a process commonly referred to as "reconciliation." If
a balancing discrepancy existed (e.g., missing or extra negotiable
instrument, amount or arithmetic error, etc.), the condition was
documented and notification of the error was slated for the sending bank.
Other conventional check processing and posting functions, commonly
referred to as "Demand Deposit Accounting" ("DDA"), were then performed to
determine whether any of the accounts on which the negotiable instruments
were drawn were restricted (e.g., closed, dormant, stop payment, account
holder deceased, etc.). If a particular account was not restricted, the
paying FI determined whether there was enough money in the account (i.e.,
sufficient funds) to cover payment of a negotiable instrument drawn
thereon.
The paying FI, in response to these determinations, either accepted or
rejected payment of the negotiable instrument, slating the reconciled
negotiable instrument for return. The paying FI notified the sending FI of
any balancing discrepancies, any negotiable instruments to be returned
unpaid, or the like. The return to the sending FI was again accomplished
by physical transportation of the negotiable instruments.
It became readily apparent as negotiable instrument volume, and in
particular check volume, increased, that conventional negotiable
instrument processing methods required automation. To facilitate this
automation, the ABA introduced a method of printing information on each
negotiable instrument, commonly referred to as Magnetic Ink Character
Recognition ("MICR"). The MICR method, which today uses a font known as
"E13B," is used to properly route and process each received negotiable
instrument. The contents of the MICR line are specified in various
American National Standards Institute ("ANSI") publications. The most
recent standard being ANSI.times.9.13 (1990). Typically, there are six
MICR fields defined: (1) dollar amount, (2) account number, (3) R/T
number, (4) process control or serial number, (5) auxiliary on-us or
serial number, and (6) external process code. The dollar amount, R/T
number and external process code are fixed as to length and content. The
other fields are variable and allow each FI the widest possible latitude
in designing the fields to meet their specific requirements.
The incorporation of MICR information on each negotiable instrument
significantly improved the clearing process in terms of speed and
flexibility. The cash letter process was automated, while the
reconciliation process remained manual.
Automation introduced additional types of reconciliation discrepancies
which were largely due to: (1) differences in processing equipment and
software used by the various FIs, (2) a lack of quality control standards
for MICR printing, and (3) exceptions caused by environmental conditions.
To address some of these problems, and to further speed the clearing
process, processing systems and, later, processing system networks were
integrated therein. More particularly, extracted MICR information on the
negotiable instruments is used to create electronic payment transactions
that are sent via data transmission means from sending FIs to paying FIs.
Today, the electronic clearing process includes electronic check
presentment ("ECP"), electronic data exchange ("EDE"), automated clearing
houses ("ACH"), branch item capture ("BIC") and check truncation. Each of
these exemplary electronic sub-processes rely on the ability for one or
more FIs to extract MICR information or data from the negotiable
instrument, convert the data to an electronic transaction, apply the
electronic transaction to an account for debiting purposes and
subsequently match the paper negotiable instrument to the electronic
transaction for reconciliation purposes.
The types of processing systems and related equipment employed in an FI's
electronic clearing process typically vary in functionality. For example,
the circuitry used to read the information contained within a given MICR
line varies with the type of equipment and the techniques used to
recognize the magnetic and/or optical representation of the individual
MICR symbols and numbers. To convert the paper negotiable instrument MICR
information to an electronic item, the MICR information is typically
scanned and formatted to conform to one of several standard electronic
transaction formats. The electronic item is then grouped with other
electronic items, similar to the cash letter process described
hereinabove, and transmitted via data transmission means, possibly through
intermediary FIs, such as Federal Reserve Banks ("FRBs"), to a paying FI.
The paper negotiable instrument follows thereafter, usually traversing
each of the same FIs through which the electronic item passed. Each FI
matches the received paper negotiable instrument with the previously
processed electronic transaction for reconciliation. Reconciliation
verifies that the electronic item was received, that there was a
corresponding paper negotiable instrument and that the MICR contents of
the paper negotiable instrument were correctly extracted and processed.
The matching process is often unduly complicated by factors such as
variability in the placement of the contents of the MICR line information
from FI to FI, the condition and quality of the paper instrument (e.g.,
torn, folded, dog-eared, etc.), the condition of the scanning equipment
from FI to FI, etc. In point of fact, the paper instrument and the
corresponding electronic item often include the same information, but due
to variability caused by one or more of the foregoing factors, the paper
instrument is incorrectly identified as a mismatch causing the electronic
item to be incorrectly processed. This introduces an unnecessary, and
often significant, latency into the check clearing process. Conventional
procedures for matching an electronic item with a corresponding paper
instrument fail to rationalize the contents of the MICR line as scanned by
each FI. These procedures also fail to provide an accurate method of
comparing and determining match criteria of a negotiable instrument's MICR
line as read and captured by one FI's equipment and subsequently read and
captured by another FI's equipment.
Accordingly, what is needed in the art is a system and method for reducing
the amount of labor intensive, manual processes needed to perform
reconciliation of electronically generated financial transactions with
their corresponding paper transactions.
There exists a further need in the art for a system and method for
measuring the criticality of certain fields within a negotiable
instrument's MICR line, and the MICR line fields themselves, for
determining the quality of the captured data from a negotiable
instrument's MICR line, for assigning variable confidence level factors to
the results of the paper instrument and electronic item comparison, and
for determining the overall accuracy of the physical to the electronic
match.
SUMMARY OF THE INVENTION
To address the above-discussed deficiencies of the prior art, it is an
object of the present invention to provide a system and a method for
reducing the amount of labor intensive, manual processes needed to perform
reconciliation of electronically generated financial transactions. It is a
further object of the present invention to provide systems and methods for
measuring the criticality of certain fields within a check's MICR line, as
well as the MICR line fields themselves, for determining the quality of
the captured dam from a negotiable instrument's MICR line, for assigning
variable confidence level factors to the results of the physical, or
paper, negotiable instrument and electronic item comparison, and for
determining the overall accuracy of the physical to electronic match.
In the attainment of the above-identified objects, the present invention
provides a reconciling circuit, and method of operation, in electronic
processing of negotiable instrument's, for reconciling a first database
with a second database, the first database containing first item data
arranged in records and fields, the second database containing second item
data arranged in records and fields. The reconciling circuit includes: (1)
a matching circuit for comparing the records of the first database with
the records of the second database, the matching circuit placing a
designation on mismatching ones of the records of the first and second
databases, (2) at least one field mismatch tolerance rule indicating, by
field, an allowed extent of mismatch and (3) a mismatch tolerance circuit
for applying the at least one field mismatch tolerance rule to the fields
of the mismatching ones of the records of the first and second databases,
the mismatch tolerance circuit removing the designation when the fields of
the mismatching ones of the records of the first and second databases fall
within the mismatch tolerance rules.
In an alternate embodiment of the present invention, the first database is
a database of predetermined presentment information relating to negotiable
instruments sent from a presenting FI to a receiving FI and the second
database is a database of information captured from the same negotiable
instruments at the receiving FI.
In an alternate embodiment of the present invention, the fields include
predefined fields of a MICR line printed on a negotiable instrument.
In an alternate embodiment of the present invention, each of the records
corresponds to a single negotiable instrument sent from a presenting FI to
a receiving FI.
In an alternate embodiment of the present invention, each of the records
corresponds to a bundle of negotiable instruments sent from a presenting
FI to a receiving FI.
In an alternate embodiment of the present invention, the at least one field
mismatch tolerance rule is at least one of a rule concerning: (1) an
allowed number of character deviations in the fields, (2) an allowed
substitution of characters in the fields, and (3) a pattern, or sequence,
of adjoining records of the first and second databases.
In an alternate embodiment of the present invention, the at least one field
mismatch tolerance rule adapts over time as a function of the first and
second item data.
In an alternate embodiment of the present invention, the second database is
a database of information captured from negotiable instruments at a
receiving FI by a MICR reader, the mismatch tolerance circuit is
employable to diagnose a faulty operation of the MICR reader.
An advantageous embodiment for using or distributing the present invention
is as software. The software embodiment includes a plurality of processing
instructions which, along with the first and second databases and the at
least one field mismatch tolerance rule, are stored to a suitable
conventional memory or other equivalent storage medium. The instructions
are readable and executable by one or more processing systems having one
or more processing circuits. The instructions, upon execution, direct the
processing circuitry to perform negotiable instrument by negotiable
instrument reconciliation for use with electronic processing in accordance
with the present invention. Exemplary memory and storage media include
without limitation magnetic, optical, and semiconductor, as well as
suitably arranged combinations thereof. An advantageous source code
embodiment is attached hereto as APPENDIX A, and is incorporated herein by
reference for all purposes.
An exemplary network in accordance with the principles of the present
invention is operative to reconcile a first database with a second
database. The network includes at least a presenting FI processing system
and a receiving FI processing system, and the first and second databases
contain first and second item data arranged in records and fields,
respectively. The network further includes a matching circuit, at least
one mismatch tolerance rule, and a mismatch tolerance circuit. The
matching circuit is operative to compare the records of the first and
second databases, and to place a designation on mismatching ones of the
records of the first and second databases. The one or more field mismatch
tolerance rules indicates, by field, an allowed extent of mismatch. The
mismatch tolerance circuit, which is associated with the matching circuit,
is operative to apply the one or more field mismatch tolerance rules to
the fields of the mismatching ones of the records. The mismatch tolerance
circuit, in response thereto, is operative to remove the designation when
the fields of the mismatching ones of the records fall within the mismatch
tolerance rules.
The foregoing has outlined rather broadly the features and technical
advantages of the present invention so that those skilled in the art may
better understand the detailed description of the invention set forth
hereinbelow. Additional features and advantages of the invention will be
described hereinafter that form the subject of the claims of the
invention. Those skilled in the art should appreciate that they may
readily use the conception and the specific embodiment disclosed as a
basis for modifying or designing other structures for carrying out the
same purposes of the present invention. Those skilled in the art should
also realize that such equivalent constructions do not depart from the
spirit and scope of the invention in its broadest form.
BRIEF DESCRIPTION OF THE DRAWINGS
For a more complete understanding of the present invention, and the
advantages thereof, reference is now made to the following descriptions
taken in conjunction with the accompanying drawings, in which like numbers
designate like parts, and in which:
FIG. 1 illustrates an isometric view of an exemplary processing system that
provides a suitable environment within which the present invention may be
implemented and operated;
FIG. 2 illustrates a block diagram of an exemplary microprocessing circuit
that may suitably be associated with the exemplary processing system of
FIG. 1, and that provides a suitable environment within which the present
invention may be implemented and operated;
FIG. 3 illustrates a schematic block representation of an exemplary MICR
capture and processing process, performed at a sending FI, in which
captured item data generates an extract cash letter file for electronic
transmission to an intermediary or receiving FI; and
FIG. 4 illustrates a schematic block representation of an exemplary MICR
capture and processing process, performed at the intermediary or receiving
FI, in which captured item data is compared with the cash letter file
created by the sending FI of FIG. 3, to determine MICR capture mismatches,
the MICR capture mismatches are compared with one or more mismatch
tolerance rules to determine whether the mismatches are within tolerance
in accordance with the principles of the present invention.
DETAILED DESCRIPTION
Preferred circuits, systems and methods for performing various aspects of a
preferred electronic check clearing process for use and in accordance with
the present invention are disclosed in U.S. Pat. No. 5,237,159, entitled
"Electronic Check Presentment System," issued Aug. 17, 1993; and U.S. Pat.
No. 5,412,190, entitled "Electronic Check Presentment System Having a
Return Item Notification System Incorporated Therein," issued May 2, 1995;
and in U.S. Pat. No. 5,532,464, entitled "Electronic Check Presentment
System Having a Return Item Notification System Incorporated Therein;"
U.S. patent application Ser. No. 08/236,632, entitled "Improved Electronic
Check Presentment System Having a Non-ECP Exceptions Notification System
Incorporated Therein;" U.S. patent application Ser. No. 08/535,739,
entitled "System and Method for Providing Electronic Advance Notification
of Closed for Cause Financial Institution Accounts;" U.S. patent
application Ser. No. 08/489,227, entitled "System and Method for Providing
Advance Notification of Potential Presentation Returns Due to Account
Restrictions." Each of the above-identified patent documents is commonly
owned with the present invention and is incorporated herein by reference
for all purposes.
Turning initially to FIG. 1, illustrated is an isometric view of an
exemplary processing system (generally designated 100). Processing system
100 is capable of being programmed in accordance with the principles of
the present invention. Exemplary processing system 100 includes a housing
105, a display device 110 and a keyboard 115. "Include," as the term is
used herein, means inclusive without limitation. Housing 105 includes a
hard disk drive 120 and a floppy disk drive 125. Hard disk drive 120 is
suitable to provide fast access storage and retrieval. Floppy disk drive
125 is suitable to receive, read or write to external disks, and may
suitably be replaced by or combined with other conventional structures for
transferring data or instructions, including tape and compact disc drives,
telephony systems and devices (including telephone, video phone, facsimile
or the like), network communication ports or the like. "Or," as the term
is used herein, is inclusive, meaning and/or.
Housing 105 is partially cut-away to illustrate a battery 130, a clock 135,
a detached local memory 140 and processing circuitry 145, all of which are
suitably housed therein. Detached local memory 140 is operative to store
data and tasks. A "task," as the term is used herein, means a set of
instructions, in either source code or object code, which upon execution
instruct or direct processing system 100 to perform a set of procedures or
functions that may suitably involve collection of data, processing, or
presentation of results. Processing circuitry 145, which is associated
with detached local memory 140, is operative to execute selected ones of
the stored tasks. "Associated with," as the term is used herein, means
included within, interconnected with, contains, contained within,
connected to, coupled to or with, communicable with, juxtaposes,
cooperates with, interleaves, or the like.
In an advantageous embodiment, display device 110 is operative to provide a
display area 150 that is accessible to executed ones of the plurality of
tasks. Display area 150 is capable of displaying a graphical user
interface in accordance with the principles of the present invention.
Further coupled through individual conventional connectors on housing 105
are a mouse 155 and a printer 160. Exemplary peripheral devices 110, 115,
155 and 160, which are all associated with processing circuitry 145, allow
processing system 100 to interact with a user. Exemplary peripheral
devices 110, 115, 155 and 160 may suitably be replaced by or combined with
other user interfaces, including voice recognition systems, scanners and
the like. "Scanners," as the term is used herein, means any suitably
arranged device providing a means by which text, images, bar codes or
other indicia may be read or perceived. Text and bar code scanners (e.g.,
MICR readers, sheet-fed scanners, hand-held scanners, etc.) typically
recognize printed fonts, bar codes, hand-writing and the like, and convert
the same into a digital code. Graphics scanners, in contrast, typically
convert printed images into video images, such as raster graphics, for
example, without recognizing the actual content of the text or pictures
scanned.
Although processing system 100 is illustrated having single processing
circuitry, a single hard disk drive and a single local memory, processing
system 100 may suitably be equipped with any multitude or combination of
processing circuitry or storage devices. Processing system 100 may, in
point of fact, be replaced by, or combined with, any suitable processing
system operative in accordance with the principles of the present
invention, including sophisticated calculators, and hand-held,
laptop/notebook, mini, mainframe and super computers, as well as
processing system network combinations of the same.
Conventional processing system architecture is more fully discussed in
Computer Organization and Architecture, by William Stalling, Macmillian
Publishing Co. (3rd ed. 1993); conventional processing system network
design is more fully discussed in Data Network Design, by Darren L. Spohn,
McGraw-Hill, Inc. (1993); and conventional data communications is more
fully discussed in Data Communications Principles, by R. D. Gitlin, J. F.
Hayes and S. B. Weinstein, Plenum Press (1992) and in The Irwin Handbook
of Telecommunications, by James Harry Green, Irwin Professional Publishing
(2nd ed. 1992). Each of the foregoing publications is incorporated herein
by reference.
Turning to FIG. 2, illustrated is a block diagram of an exemplary
microprocessing circuit (generally designated 200) that may suitably be
associated with processing system 100 of FIG. 1. Microprocessing circuit
200 includes detached local memory 140, processing circuitry 145, bus
controller circuitry 205, a conventional read-only memory ("ROM") 210 and
a set of peripheral ports 215. A host bus 220 is shown and is suitably
operative to associate processing circuitry 145, detached local memory 140
and bus controller circuitry 205. In accordance with the illustrated
embodiment, detached local memory 140 may suitably include random access
memory ("RAM"), and processing circuitry 145 may suitably include one or
more processors acting in concert.
An input/output ("I/O") bus 225 is shown and is operative to associate bus
controller circuitry 205, ROM 210 and the set of peripheral ports 215. The
set of peripheral ports 215 couple I/O bus 225 to peripheral devices 110,
115, 155, and 160 of FIG. 1 for communication therewith. Included among
the set of peripheral ports 215 is a parallel port. Bus controller
circuitry 205 provides suitable means by which host bus 220 and I/O bus
225 may be associated, thereby providing a path and management for
communication therebetween. In accordance with the illustrated embodiment,
host bus 220 is relatively fast to facilitate rapid communication between
processing circuitry 145 and detached local memory 140 and is typically
burdened with as few components as possible to maximize its speed. I/O bus
225 is allowed to run at a slower pace with respect to host bus 220
because its speed is less critical. Each of the lines of conventional
buses 220, 225 require a drive current to carry signals thereon. The
illustrated embodiment therefore operates in conjunction with a
conventional system controller (not shown) that supplies the required
drive current. Of course, the present invention may also suitably function
within an architecture that only has a single bus or, alternatively, more
than two buses.
In accordance with the present embodiment, detached local memory 140 is
operative to store data or tasks, which processing circuitry 145 is
operative to retrieve and execute. Processing circuitry 145 includes a
control unit 230, an arithmetic and logic unit ("ALU") 235, and a internal
memory 240 (e.g., stackable cache, a plurality of registers, etc.).
Control unit 230 is suitably operative to fetch ones of the instructions
from memory 140. ALU 235 is suitably operative to perform a plurality of
operations, such as addition and Boolean AND, needed to carry out those
instructions. Internal memory 240 is suitably operative to provide local
high speed storage used to store temporary results and control
information.
In an advantageous embodiment, processing system 100 is located at a
receiving or an intermediary financial institution ("FI"). Hard disk drive
120 and detached local memory 140 are suitably arranged to cooperatively
store first and second databases, a control task and at least one field
mismatch tolerance rule. The first and second databases respectively
contain first and second item data arranged in records and fields. The
first database is a database of predetermined presentment information,
such as extracted MICR information, relating to negotiable instruments
transmitted, such as electronic checks, from a presenting FI to the
receiving or intermediary FI. The second database is a database of
information captured from one or more physical or paper negotiable
instruments, such as corresponding MICR information, at the receiving FI.
The control task, upon execution, directs processing circuitry 145 to
control electronic check processing in accordance with the present
invention and, more particularly, to reconcile the first item data of the
first database with the second item data of the second database.
Processing circuitry 145 compares the records of the first database with
the records of the second database and, in response thereto, places a
designation on mismatching ones of the records of at least one of the
first or second databases. Processing circuitry 145 then applies at least
one of the one or more field mismatch tolerance rules to the fields of the
mismatching ones of the records. The one or more field mismatch tolerance
rules indicating, by field, an allowed extent of mismatch. If the fields
of the mismatching ones of the records compare favorably with the one or
more applied mismatch tolerance rules, then processing circuitry 145
removes the above-identified mismatch designation from the mismatching
ones of the records.
In an exemplary embodiment, the allowed extent of mismatch associated with
ones of the field mismatch tolerance rules define or represent points
separating conditions that produce a given effect from conditions of a
higher or lower degree that will not produce the effect. For example, at
least one of the one or more field mismatch tolerance rules may suitably
represent at least one of: (1) a rule concerning an allowed number of
character deviations in the fields, (2) a rule concerning an allowed
substitution of characters in the fields, and (3) a rule concerning a
pattern of adjoining records of the first and second databases. In a
related exemplary embodiment, the control task further directs processing
circuitry 145 to adapt or modify at least one of the one or more field
mismatch tolerance rules over time as a function of the first and second
item data. The adaption or modification may, for example, be in response
to a sensitive scanner or other equipment problem within the transmission
path.
An important aspect of the present invention is that ones of the field
mismatch tolerance rules may be based upon, derived from, or established
upon any suitably applied mathematical theory, including statistics,
stochastic modeling, chaos theory, standard deviation, probability theory,
permutations and combinations, frequency, or the like.
In alternate preferred embodiments, the above-identified microprocessing
circuit 200, in whole or in part, may be replaced by or combined with any
other suitable processing circuits, including programmable logic devices,
such as programmable array logic ("PALs") and programmable logic arrays
("PLAs"), digital signal processors ("DSPs"), field programmable gate
arrays ("FPGAs"), application specific integrated circuits ("ASICs"), very
large scale integrated circuits ("VLSIs") or the like. Those of ordinary
skill in the art should realize that processing system 100 described
hereinabove is co-operable with the processes, files, tasks and databases
and various other machines, such as MICR readers, to be described more
particularly hereinbelow, to form the various types of circuitry described
and claimed herein.
Turning to FIG. 3, illustrated is a schematic block representation of an
exemplary MICR capture and processing process (generally designated 300),
illustratively performed at a sending FI, in which captured negotiable
instruments, such as paper checks, and deposit slips are processed.
Exemplary conventional software and hardware for performing the foregoing
include IBM 3890 reader/sorters and IBM Check Processing Control System
("CPCS"), Unisys DP 1800 reader/sorters and Unisys Item Processing System
("IPS"), or the like. These processes create both paper cash letters and
electronic cash letters. The electronic cash letters are grouped into ECP
files which are transmitted through data transmission means to either an
intermediary, such as a FRB, an ECH, a data center or to the receiving or
paying FI. The actual paper cash letters are physically transported,
typically through each of the intermediaries, if any, which the ECP file
passed, to the receiving FI.
More particularly, during the course of daily operations of an FI, such as
a commercial bank, deposited negotiable instruments 310 are received from
a variety of sources and transactions (e.g., over-the-counter, drive-in
depositories, automated teller machines ("ATMs"), mail or lockboxes,
etc.). Deposited negotiable instruments 310 are accompanied by a deposit
slip 312 that reflects the depositor's FI account number and the sum of
the dollar amounts of the accompanying negotiable instruments. Many of
deposited negotiable instruments 310 are drawn on other FIs, but may also
include checks drawn on the depositor's FI. The latter items are commonly
referred to as "on-us" deposited checks.
In conventional data capture systems, negotiable instruments and deposit
slips are preconditioned for processing and are read through
scanner/reader/sorter machines 320 (including, optical or other mechanical
or electrical data capturing systems or machines, etc.),
collectively-commonly referred to within the broader term "data capture
circuitry," with groups of deposit slips and negotiable instruments being
processed in transaction sets. During the data capture process, the
deposit portion of the transaction set is first read and validated and
information contained on the MICR line is extracted and stored in a
database.
The physical documents may suitably be microfilmed, have a unique item
sequence number ("ISN") assigned, or be directed to a designated pocket of
the reader/sorter as either "on us," for those items drawn on the FI
performing the capture and sorting operations, or as "transit," for those
items drawn on all other FIs. Transit negotiable instruments 322 are
directed, or segregated, to multiple pockets corresponding to the specific
FIs on which the negotiable instruments are drawn (i.e., the paying FI),
to correspondents of the paying FI or to specific Federal Reserve
Districts or cities according to predefined tables commonly referred to as
"sort patterns." The segregated negotiable instruments are then wrapped
with a processing system generated detail list and cash letter covering
report 323 for each group of negotiable instruments and the groups are
dispatched via ground or air transportation to the other FIs for further
processing.
The MICR code line information that has been extracted from the negotiable
instrument is used to prepare electronic files for early data transmission
to the other FIs, far in advance of the physical groups of negotiable
instruments set forth above, which are to be dispatched at a later time.
Thus, during the high speed capture process, a database may suitably be
created on a host processing system that contains the data extracted from
each item's MICR line. This database may suitably be referred to as an
"all items file" 330. All items file 330 may advantageously contain ones
of the following data for each item processed, namely,
(1) from a deposit slip:
(a) depositor's account number; (b) deposit amount; (c) deposit process
control; (d) deposit auxiliary on-us; (e) deposit item sequence number;
and (f) deposit out-of-balance indicator; and
(2) from a check:
(a) account number; (b) check amount; (c) check process control; (d) check
auxiliary on-us or check number; (e) check item sequence number; (f) check
R/T; (g) external process control code; and (h) eligibility/disposition
code.
The illustrated embodiment may suitably employ all items file 330 as a
database from which eligible detail items, corresponding to a physical
negotiable instrument, are extracted in an extraction process 340 to
provide an early determination of whether an item is drawn on an FI that
is capable of receiving an ECP file. This determination may be made as a
result of a comparison of the negotiable instrument's R/T to a file of
eligible R/Ts contained on a central information file ("ClF") 350.
The extraction process 340 generates an extract file of items eligible for
ECP processing that is formatted and prepared for transmission 370 to
generate a transmission file 380. Transmission file 380 contains data from
only those negotiable instruments eligible for further processing that has
preferably been formatted into a suitable standard format. Transmission
file 380 is transmitted via electronic means to an applicable receiving or
intermediary FI.
Turning now to FIG. 4, illustrated is a schematic block representation of
an exemplary MICR cash letter capture and processing process (generally
designated 400), illustratively performed at the receiving FI where
captured cash letter data related to previously transmitted ECP file 380
is compared to determine mismatches. The resulting mismatches, if any, are
compared with one or more mismatch tolerance rules to determine whether
the mismatches are within tolerance in accordance with the principles of
the present invention.
Conventionally, transmission file 380 is used by a receiving FI to: (1)
further segregate the electronic items contained therein to their final
destination, typically determined by the R/T, or (2) accelerate the
posting of a DDA account prior to a physical negotiable instrument
corresponding to a particular electronic item being received.
After the ECP process has completed at the receiving FI and suitably passed
to a "next" FI, if any, the receiving FI receives a physical cash letter
(i.e., the segregated checks 322 wrapped within the processing system
generated detail list and cash letter 323) via ground or air
transportation from the sending FI, such as that of FIG. 3. The set of
checks 322 associated with cash letter 323, are preconditioned for
processing, if necessary, and are read through a scanner/reader/sorter
machines 410 (including, optical or other mechanical or electrical data
capturing systems or machines, etc.), also collectively-commonly referred
to within the broader term "data capture circuitry." During the data
capture process 411, the negotiable instruments are again read and
validated and information contained on the MICR line is extracted and
stored into a captured item database 414. The physical documents may
suitably be microfilmed, a unique item sequence number ("ISN") be assigned
or the documents be directed to a designated pocket of the reader/sorter
as either "on us" for those negotiable instruments drawn on the receiving
FI or as "transit" for those negotiable instruments dram on all other FIs.
If processing is performed by the receiving FI, all negotiable instruments
are considered as "on-us."
The transit items may again be directed to multiple pockets corresponding
to the specific FI on which a particular negotiable instrument was drawn
(i.e., the paying FI), to a correspondent of the paying FI or to specific
Federal Reserve Districts or cities according to sort patterns. The
segregated negotiable instruments 412 are wrapped with a processing system
generated detail list and cash letter covering report 413 for each group
of negotiable instruments. The groups (i.e., cash letters) are dispatched
via ground or air transportation to the other FIs for further processing.
Captured item database 414 preferably includes ones of the following fields
for each negotiable instrument processed, namely, (a) account number; (b)
check amount; (c) check process control; (d) check auxiliary on-us or
check number; (e) check item sequence number; (f) check R/T; (g) external
process control; and the like.
The receiving FI performs a matching process 415, whereby an electronic
comparison is suitably made between ones of the records associated with
extract file database 380 and ones of the records associated with captured
item database 414. Techniques for performing matching between databases,
files, records, fields, or the like are known. Extract file database 380
items that do not match corresponding items of captured item database 414
are suitably identified as "mismatched" by placing a designation on
mismatching ones of the records, or in alternate embodiments on
mismatching ones of the fields, of at least one of databases 380 and 414.
The receiving FI electronically performs a mismatch tolerance process 425,
whereby a set of field mismatch tolerance rules (i.e., one or more) 430 is
applied to the fields of the mismatching ones of the records of at least
one of extract file database 380 and captured item database 414. The set
of field mismatch tolerance rules 430 indicates, by file, record, field,
or the like, various types of an allowed extent of mismatch of the
mismatching ones of the records of databases 380 and 414. In an exemplary
embodiment, the set of field mismatch tolerance rules may suitably include
at least one of a rule concerning: (1) an allowed number of character
deviations within the mismatching fields, (2) an allowed substitution of
characters in the mismatching fields, (3) a pattern of adjoining records
of extract file database 380 and captured item database 414. In alternate
embodiments, ones of the set of mismatch tolerance rules may suitably be
derived using any suitably applied mathematical theory, as has been set
forth hereinabove.
More particularly, the source code embodiment attached hereto as APPENDIX
A, and incorporated by reference hereinabove, provides a means by which
the contents of the MICR line of an item received as extract fie database
380 and captured into captured item database 414 may suitably be
rationalized. Upon execution, the code directs a processing system, such
as processing system 100, to measure the criticality of certain
characters, such as digits, within the item's MICR line, as well as the
MICR line fields themselves, thereby determining the quality of the
captured data, assigning variable confidence level factors to the results
of the comparison and determining the overall accuracy of the physical
negotiable instrument as compared to the electronic match.
For the purposes of discussion, it is assumed that a full MICR line match
(i.e., no fields excluded), a full field reject repair, and a R/T single
digit repair have all been performed. Each of these concepts are known. A
confidence level factor is also suitably assigned to each field in the
MICR line, preferably by processing system 100, such as:
TABLE 1
______________________________________
FIELD CONFIDENCE LEVEL
______________________________________
Dollar Amount 8
Account Number 7
Aux. on-us 4
R/T 2
Process Control 0
External Process Control
0
______________________________________
Processing system 100 determines a count of the number of bad reads (e.g.,
characters or digits that were unreadable by the scanner, reader/sorter
equipment) of each of the above-identified fields. In a preferred
embodiment, the dollar amount and R/T fields may suitably be further
subdivided, such as, (1a) Dollar Amount--Low order 5 digits, (1b) Dollar
Amount--High order digits, (2a) R/T--Check digit, and (2b) Base R/T
number. In accordance therewith, processing system 100 assigns a maximum
number of unreadable digits (i.e., bad reads) allowed per field, such as:
TABLE 2
______________________________________
FIELD MAXIMUM BAD READS
______________________________________
Dollar Amount
Low Order 0
High Order 3
Account Number 2
Aux. on-us 2
R/T
Check Digit 1
Base R/T Number 0
Process Control/Serial Number
0
External Process Control
1
______________________________________
If the number of bad reads in any field exceeds the allowable number, a
current item remains a mismatch. In a related embodiment, if the current
item is considered mismatched, but it is preceded or followed by a matched
item, such as a negotiable instrument or group of matched negotiable
instruments, the maximum allowable number of bad reads associated with the
current item may suitably be increased for one or more of the fields.
Processing system 100 determines if the total number of bad reads per item,
as weighted by the confidence level factor by field as set forth
hereinabove, is greater than an associated limit. If the total number of
weighted bad reads is greater than the associated limit, then the current
item remains a mismatch. Again, however, if the current item is considered
mismatched, but it is preceded or followed by a matched item, such as a
negotiable instrument or group of matched negotiable instruments, the
associated limit may suitably be increased, such as by a percentage
factor.
Consider the following example wherein the associated limit per item is 46.
TABLE 3
______________________________________
Field Bad Read Confidence
Results
______________________________________
Dollar Amount
Low order 0 8 0
High order 3 8 24
Account Number 2 7 14
Aux. on-us 2 4 8
R/T
Check Digit 0 2 0
Base R/T Number
1 2 2
Process Control/Serial Number
2 0 0
External Process Control
1 0 0
Total 11 31 48
______________________________________
Since the total number of weighted bad reads (48) exceeds the associated
limit (46), the current item associated with Table 3 remains a mismatch.
Assume, however, that the items preceding or succeeding the current item
associated with the values set forth in Table 3 were matched, a percentage
factor may suitably be used to increase the associated limit above 46.
Assuming a percentage factor of 10%, for example, a revised associated
limit of 50.6 (i.e., 46+4.6) results in the current item qualifying as a
match. In a related embodiment, missing or "blank" fields may suitably be
assigned a maximum number of bad reads as a function of the field size,
however, the Full Dollar Amount and/or the Full Account Number fields may
not be missing. Use of percentage factors may be based on any suitable
applied mathematical theory, it should be understood that the value of a
given percentage factor may be application or situation dependant, and may
suitably be adaptive over time. More generally, various ones of set of
field mismatch tolerance rules 430 may suitably adapt over time as a
function of extract file database 380 and captured item database 414. For
example, the limit associated with an item may suitably be permanently set
equal to the revised associated limit of 50.6, as calculated hereinabove.
Further, in alternate embodiments, the set of mismatch tolerance rules
430, in whole or in part, may suitably include rules based upon any
suitably applied mathematical theory.
Processing system 100, in response to application of the set of mismatch
tolerance rules 430 to the fields of the mismatching ones of the records
of extract file data base 380 and captured item databases 414, may
suitably remove the mismatch designation when the fields of the
mismatching ones of the records fall within the mismatch tolerance rules.
In an alternate preferred embodiment, processing system 100, as a function
of mismatch tolerance process, may suitably use one of extract fie
database 380 or captured item database 414, or the frequency of removal of
mismatch designation, to diagnose an operation, or mis-operation, of the
MICR reader, or other equipment, used during the capture process locally,
or at a sending FI.
Upon completion of mismatch tolerance process 425, processing system 100
may traverse extract file database 380 or captured item database 414 to
create a report of any mismatched items 435. The mismatched items are used
to generate a report or other files 435 adapted to interface to other
systems, such as of the sending FI, for example to generate an adjustment
notification in the event of a large dollar mismatch. This report 440 may
simply take the form of the mismatched items in a properly formatted file
or another appropriate form, such as an interactive database or real-time
alert. The report may be printed on paper or may be embodied in
machine-readable form 440.
It should be understood that while the illustrated embodiment was presented
with respect to a sending FI and at least one Intermediary or receiving
FI, the principles of the present invention may suitably be implemented in
connection with any single or plurality of FIs. From the above, it is
apparent that the present invention provides a reconciling circuit for,
and method of, reconciling a first database with a second database, the
first database containing first item data arranged in records and fields,
the second database containing second item data arranged in records and
fields. The reconciling circuit includes: (1) a matching circuit for
comparing the records of the first database with the records of the second
database, the matching circuit placing a designation on mismatching ones
of the records of the first and second databases, (2) at least one field
mismatch tolerance rule indicating, by field, an allowed extent of
mismatch and (3) a mismatch tolerance circuit for applying the at least
one field mismatch tolerance rule to the fields of the mismatching ones,
the mismatch tolerance circuit removing the designation when the fields of
the mismatching ones fall within the mismatch tolerance rules. An
important aspect of the present invention is the reduction of the amount
of labor intensive, manual processes associated with conventional
approaches for performing reconciliation of electronically generated
financial transactions and to provide an automated means for generation
and transmission of adjustment items as the result of the mismatch
conditions.
The present invention is not limited to embodiment in a personal computer
illustrated in accordance with FIGS. 1 and 2. The present invention may,
in point of fact, suitably be more preferably embodied in computing
equipment that has traditionally found more widely-accepted use in the
banking industry, such as minicomputers, mainframe or super computers. The
principles of operation of the present invention are, without regard to
the class or type of associated processing system, fundamentally the same.
The present invention may alternatively be implemented in firmware or in
hardwired integrated circuits or discrete electronic components.
Although the present invention and its advantages have been described in
detail, those skilled in the art should understand that they can make
various changes, substitutions and alterations herein without departing
from the spirit and scope of the invention in its broadest form.
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